Israel has very high poverty rates for an OECD country, 23.5 percent, and yet the average middle class (and up) Israeli doesn't seem to care. The question is why not? Are middle class Israelis simply cruel and unfeeling? The answer according to the NY Times article, Israel's Undeserving Poor, is actually much more complex.

Two segments of Israel’s population stand out as the poorest of the poor: “ultra-Orthodox Jews” and “Muslim-Arabs.” Unemployment rates for ultra-Orthodox Jews (mostly ultra-Orthodox men) and Arabs (mostly Arab women) are very high. So are birth rates. The result: 59 percent of the ultra-Orthodox (also known as Haredim) are poor. Similarly, 58 percent of Arab Israelis are poor. ...to be blunt, Israelis know that Haredis and Arabs are disproportionately represented in the underground economy (namely, by evading taxes). Finally, to a large extent they are poor because of choices they make — preferring their traditions over participating in the modern Israeli economy. Simply put: For Haredi Jewish men, the choice is generally to study the Torah and have many children (while the women have to provide for the families). For Muslim Arabs, it is to keep women at home and have many children (while the men go to work)....For the comparatively well-to-do to care more about Israel’s poverty, they first have to be convinced that the necessary measures have been taken to eliminate poverty-by-choice....Only when unemployed Haredi men and Arab women go to work and black-market tax evaders are forced to pay taxes will the middle and upper classes be more open to thinking about a redistribution of wealth. Right now, the majority of Israelis have good reason — or good excuse — to object to any redistributive attempts to take from them and give to others....For middle-class Israelis to care, the message from the state should be quite different — one that could be called compassionate cruelty. The state should be telling its citizens: We don’t much care if the poor-by-choice get even poorer and get even less from the state. We don’t much care about poverty rates that take everybody into account without much consideration of personal and communal decisions and their consequences. But we will ensure that those willing to work and pay their dues are properly assisted, and the government will make sure that they are the only ones to be raised above poverty level on the government’s dime.
There is no question in my mind that the article is correct. I see this attitude every day at work (hi tech). The people at work are upper middle class and are concerned citizens, but have no interest in transferring their hard earned money to people who they believe are poor by choice and are expecting to be supported by the government.

As I posted a while back (The cash machine that is the Israeli government) the Charedi population looks at the government as a cash machine, give us money and leave us alone. The budget is a zero sum game, whatever we can save and get for us great whatever doesn't go to us is basically lost. The Charedi population views itself as hardly using any government services no, schools, university, roads, police, jails, etc. (which is of course not true, they use the roads, health care, the army protects them etc). In addition, the Charedi population pays less in direct taxes because many people don't work, they are poor, and those who do work get a lot of money under the table and therefore when they get money from the government they don't look upon it as their tax money coming back to them. Because of this, the Charedi MKs are seemingly always trying to get more money for their constituents.

Until there is a fundamental shift (as the article states) attitudes are not going to change and poverty is not going to move people to action.

Today, גמחי"ם are completely unregulated and can basically do what they want. The Israeli government is working on legislation to change this, the proposed legislation will put the גמחי"ם under the supervision of the Bank of Israel (as banks and money changers are today). The main element of the law is that all customers, depositors and lenders must be identified and the sums of money reported. According to the Charedi press this will cause most of the גמחי"ם to simply close. The question is why? Additionally, the question is why is the government doing this? Is it just another anti-Charedi law or is there some real reason for this?

The answer to the second question will answer the first question as well. The main reason that the government is proposing the new law is to crack down on money laundering. גמחי"ם today are a very easy way to launder money. Let's say you have 100,000 shekel that you don't want the government to know about it and you want to launder. The solution is simple, you go to a גמ"ח and give them the 100,000, you then immediately take a loan of 100,000 from the same גמ"ח and kick back a small percentage to the גמ"ח owner. You now have a legitimate 100,000 "loan" which is tax free which you simply never pay back. If the government comes knocking asking about where you got the 100,000, you show them the loan papers from the גמ"ח. Since there is no regulation, there is no way for the government to know if you paid/are paying back the loan. Everyone wins, you have laundered your money and the גמ"ח owner makes an easy profit. How much of this is going on is pure speculation, in any case this is what the government wants to prevent.

The Charedi opposition to this is for 2 reasons:

A lot of money made in the Charedi world is "off the books" and not reported to the government. There is no question that the גמחי"ם are laundering some of it. If the גמחי"ם will now need to report every transaction it will be much harder to hide this money.

Charedim have an inherent mistrust of the government. Therefore, even if they are doing nothing wrong they don't want the government knowing how much money they have.

What is clear is that this bill will pass in the near future and that this will be another blow to the average Charedi Avreich who depends on גמחי"ם to survive. With fewer גמחי"ם it will be much tougher to borrow the money they desperately need.

Sunday, December 29, 2013

That seems to be the best that anyone can come up with (see for example למה צריך בכלל את מסע המועצת?) which is pretty sad. The Charedi world in Israel is collapsing under financial strain and this big event is going to cost millions of dollars, wouldn't that money be better used to actually support the poor?

It seems that Satmar will be participating and as I wrote earlier they have some very strict conditions including no speeches in English (except for 1). That won't play very well in NY and the US where except for the Chasidim the rest of the Charedi world doesn't really speak Yiddish any more. What they hope to accomplish is a mystery. This is the reason that R' Shteinman has not really supported this, he understands the situation and doesn't see the justification for the event.

Thursday, December 26, 2013

As of now, the Chasidic Rebbes from Israel are planning on coming to NY the week of January 6th for a major rally/protest against the Israeli government on Tuesday January 7th. They are still looking for a venue as an outdoor stadium is out of the question in the winter and places like MSG are too small.

The big question is what is the purpose of the visit and what do they hope to accomplish? There has been talk of the Rebbes meeting high ranking officials/politicians to discuss the "persecution" of Charedim by the Israeli government.

IMHO, this is silly for a number of reasons. As the Satmar Rebbe said, the average American will not understand the Charedi position at all. The call by the Israeli government for sharing the burden seems very reasonable as do the budget cuts for schools that don't learn secular studies. It is very difficult to explain on one hand how you participate in the government and take money while on the other hand you won't share the burden. In addition, Americans are not particularly fond of "welfare queens" which in truth, is what the Charedi population looks like. They want to not work and be supported by the government. In fact, this may actually affect the Charedi population in the US negatively because it may cause people to look more carefully and critically at the Charedi lifestyle (Section 8, welfare, medicare, shools, that don't teach secular studies, etc.) in the US.

The other reason given is to explain the situation to the Charedim in the US and get their support. Here also, I believe that this is not going to work. On one hand, the true believers, already believe and support the cause. On the other hand, the moderate Charedi who works may not be persuaded, if his kids can learn secular studies in high school why not in Israel? If he can work for a living why not in Israel? If anything this may cause a crisis of faith among these people as they start to question the wisdom of their leaders.

The other big question still unanswered is whether Satmar will participate. On one hand Satmar brings a lot of people, on the other hand they also have a lot of demands for their participation including:
1. All speeches in Yiddish
2. No Israeli politicians (Charedim) can speak
3. The freedom to attack "moderates" like R' Shteinman

It will be fascinating to watch how this plays out over the next few weeks.

Monday, December 23, 2013

In response to the upcoming visit to the US by prominent Chasidic rebbes to protest against the Israeli government the Satmar Rebbe said the following at a dinner last Saturday night.

There is a very big question. How can they make a demonstration [against the Israeli government] in front of the non-Jews when they themselves are part of the government and taking money from the government? Why should the non-Jew understand? The Charedi is benefiting from government budgets, is part of the government and has MKs in the government, why should he be any different then a chiloni? This is exactly what the government is asking from the Charedim, to share the burden. The non-Jew can understand that those God fearing Jews who don't participate and have nothing to do with the government and get no government money have a right to not be drafted as well and therefore a demonstration is worthwhile.

Now, you can disagree with his point regarding those who don't take government money, but his point regarding those who do take money is very hard to refute. If you participate in the government and take money then you also need to contribute, the government is not simply a cash machine.